Eskom denies allegations that it is broke

Electricity parastatal Eskom on Sunday denied media reports that the state-owned company (SOC) is facing a cash crisis.

Eskom had noted weekend media reports concerning its financial sustainability, it said in a statement.

“Due to limitations around disclosing financial information before the official announcement which is scheduled for Wednesday, Eskom is not in a position to respond comprehensively to the specific issues raised at this stage. Having said this, Eskom refutes the notion that it is facing a cash crisis and that it has only enough cash to last for the next three months,” Eskom said.

External auditors had confirmed Eskom as a going concern and, as a result, the company saw these reports as being inaccurate and misleading.

“It is important to reiterate that Eskom is not facing any liquidity challenges and that the company is confident that it will maintain sufficient liquidity to support its operations.”

Eskom said the 2014/15 annual financial results stated an emphasis of matters in relation to its going concern, which was addressed and subsequently removed in the 2015/16 financial year.

While Eskom’s financial position had always been supported by significant reliance on debt and borrowings, its improved overall financial and operational performance over the past two years had led to an improved balance sheet. Eskom also had sufficient government guarantees to execute its funding plan, and had maintained access to capital markets and raised committed funding, Eskom said.

“As stated above, the details about Eskom’s operational and financial performance will be announced on Wednesday where members of the media and other key stakeholders have been invited. Eskom will continue to meet with a number of stakeholders ahead of releasing the results this week,” it said.